A proper economics debate: Ed Balls back on the economy beat
ED BALLS has finally got his feet under the chancellor’s table. Well, at least under the shadow chancellor’s desk. After being initially overlooked by Labour leader Ed Milliband, his fellow Ed has taken over after the resignation of Alan Johnson for personal reasons.
It’s not my place to pontificate on the reasons for Johnson’s departure. By far the more interesting issue is what kind of shadow chancellor Ed Balls will make. To put it another way, is he an FD of UK plc in waiting?
It’s worth bearing in mind what the economic debate is right now. On the one hand the government and its austerity measures “now” programme and, on the other, the opposition which believes in a credible plan for deficit reduction, but at a slower pace.
It’s fair to say that the opposition’s economic argument has been less than loud and clear since the leadership of the party changed. Indeed, at times it has struggled to emerge from the mirth surrounding Alan Johnson’s gaffs and the self deprecation on his own ability with economics. First impressions are often lasting ones with the electorate and after a stumbling start Johnson was not exactly making headway.
Labour therefore needed a change and that they have in Balls. In truth, given his experience, tainted as it may be by association with Gordon Brown, he was the only choice for the job.
Before Johnson’s appointment Balls was seen as representing the most convincing opposition to George Osborne’s economic policy. In August last year he made his Bloomberg speech in which he laid out his alternatives to government policy and explored the reasons why. It received some praise from commentators and economists alike.
Whether you agree with him or not, the interesting about that speech is that it provides the basis for understanding where Balls is coming from. And where he’s likely to go. He is intelligent, an expert and politically aggressive. Like him or loathe him we should now see a much more lively economic debate about the future of Britain.
But importantly for debate about the economy, George Osborne should face tougher questioning. It will be difficult though. With almost a free hand on the argument the government line of cutting now is on the way to becoming aceepted policy dogma. Balls will struggle to reverse that.
One route for him to go could be on something like the Office of Tax Simplification. As much I wouldn’t want anyone to pick on John Whiting, Balls could find a soft underbelly there to target. The question? Is the OTS really dealing with changes that will make any real difference to business?
That could fit into a Balls agenda about building the economy before beginning the cuts. VAT is another one. Why a hike there, hitting business, and not somewhere else?
We could see Balls work hard to make Labour the party of small and medium sized business and present the government as the road block to growth. That’s a hard sell, but with SMEs still hurting because of the lack of credit in the market and the government still campaigning for lending pledges from the banks, it could be place where Balls makes headway.